Wide Area Information Servers
June 18, 1994
This should be a fun and productive meeting where we get to direct WAIS
Inc's next 2 years. Thank you for helping.
WAIS Inc is one of very few profitable Internet companies— a very hot area
with lots of new entrants. We have the opportunity to grow this company
hard and fast.
We have put together a set of materials about our company, but other
materials are available. Please read these materials and suggest inspiring
background reading for others to read.
1040 Noel Drive Menlo Park CA 94025
WAIS Inc Planning Meetings
June 5, 1994
Goal: Create the company product and partner strategy for the next 2 years.
How: Sequester the board and management, with advisors and employees
when appropriate. The result is a written plan somewhat like a business
plan, but with the focus of guiding management.
When: June, 1994.
June 18 Distribute materials
June 20 Staff meeting with participants
June 19,21 Planning meeting at WAIS Inc offices
Rest of June Follow-up and Refinement
Who (alphabetical): Bill Dunn, Brewster Kahle, Bruce Gilliat, Gary
Hromadko, John Duhring, Nick Scharf. Others as appropriate.
After: Advisory council for our direction: Terry Winograd Stanford, Peter
Lyman UCLA, Bill from AOL, Lew Tucker TMC, Bob Clark EB, ...?
What lessons can we draw from our 2 years?
What markets are we are trying to serve?
What is our product/service going to be?
What technology changes and competition is likely in our market?
What is our partner strategy?
What are our revenue targets?
How much outside money do we need?
What company structure is required meet this plan?
I have included a set of materials that give some background on where we are
now. This is not meant to be a proposal, but rather background on our
1040 Noel Drive Menlo Park CA 94025
Revenue By WAIS Fiscal Quarter
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Not confirmed numbers. Fiscal 94 is July I, 1993 to June 30, 1994 (almost
Draft June 19, 1994
WAIS Inc Current Business
June 6, 1994
WAIS Inc sells tools and services to network publishers. Network publishers
are traditional publishers, government, libraries, and distributed corporations
that want to make textual and image information available over networks.
To achieve these goals we pursue contract work, sell products, and are starting
to run a network publishing operation ourselves. Broken out here is
government in DC work since it is growing to be more and more distinct
from our Menlo Park operations.
Overall business plan:
1993 Contract work, build the product 1.0
1994 Sell the product, build info services, continue contracts, build v
1995 Sell products, scale up Info Systems, license parts of product
1996 Info generating significant royalty, selling products, high profile
Government Systems and Sales for Fiscal 1994 (July 93-Tun 94)
Selling to the goverrunent is 50% of our business broken up into contract
(17%) and product sales (33%). Our two big contracts came through and are
proceeding well. The product sales are often closely related to the contract
work. We have one person full time on contract fulfillment and sales (Kevin
Oliveau), and Brewster is spending a decreasing amount of time irt sales.
If we do not actively push this area, we will probably lose it. Strategy
• Make a self supporting DC office (total cost: $200k for fiscal '95)
® More on sales front?
Q4 93-Ql 94: Open Source, and DTIC are our major accounts for building
information services. DTIC based in DC and Open Source is both Menlo Park
Company Confidential Draft June 19, 1994
Systems Sales Fiscal 1994 (Tuly 93-Tun 94)
This contract work is pre-paid work for customers (other than government)
(15% of our business). This breaks into publishing systems and protocol piece
integration (4% of our business).
On publishing systems we have 2 people and 2 main contracts (John Duhring,
Dan Aronson; and Dowjones and Scholastic). On protocol licensing we have
1 person and 2 new contracts (Margaret St Pierre; Fulcrum and Conquest).
Sales is a decreasing part of Brewster's time.
Both of these areas will need at least 1 more technical person each.
• Do we focus on sales to publishers?
Our selling structure on this has been to write lots of proposals. Getting more
efficient at this is important. We are missing opportunities in this area by our
proposal writing volume. We are starting to move from $25k-$50k proposals
to $100k-200k proposals.
Q4 93-Ql 94: Dowjones is our major account based in Menlo Park.
WAIS Inc Products Fiscal 1994 (Tuly 93-Tun 94)
Product sales are "on-the-pricelist" sales. 68% of total sales = 33%gov +
33%com + 2%edu. These are often part of contracts so the sales of our
products often resemble contract sales. Most of our product sales have come
from people who have used the freeware for a long time.
We stand to fall behind this area if we do not invest more in product
development. Strategy decisions:
• Reorganize our server product to allow independent development?
• Better marketing and OEM sales efforts?
• Recruit an Engineering manager?
Our pricing of our products is lower than competition (other than freeware)
to try to get volume. We, only now have a sales force, so our success here is
limited. OEM sales where our product is bundled or pieces modified and sold
are an increasing part of our sales. The sales cycle is long— we have not gotten
precise numbers but it is over a year since they start using WAIS, and 6-9
months after they start to consider buying the commercial software.
This year's strategy is to add a marketing person to this line of business and
continue to upgrade our server product line while adding new components
to the product line.
Company Confidential Draft June 19, 1994
The company structure for supporting this work is very flat— An engineering
plus marketing meeting helps form the basis of the products we will pursue,
and then individual project leaders help define the product features and
schedules. Sales of these products is done by Bruce Gilliat and Kevin Oliveau.
Goals for next year: Have the finest commercial Internet server product on
the market. Gateway to many popular networks. Understand the sales cycle
Draft June 19, 1994
Information Services from WAIS Inc.
Pfesented by John Duhring (Junel9, 1994)
What we have learned:
• Publishers want control over their assets
• Publishers want access to many markets from one source
• Users value the experience derived from the service
• WWW is adequate for now
• WAIS-based sytems provide cost effective archictectures for;
- Subscription services (DowVision)
- Sponsored services (Intel)
- Catalog services (Scholastic)
• Issues exist but are being addressed:
- Load balancing/ scalability
Current WAIS Inc. strategy:
• Team with recognized brand names
- Knowledge of market
- Design capabilities
- Metadata development
• Prototype /Develop /Operate services
- Recover costs up front
- Participate in operational revenue
• Derive enhanced products for sale by WAIS Inc.
- Name brand partners create product testbeds
Building "the Information Interface" (our WWW advantage) :
• Store content in a DB with easy to use access points
• Build html documents of the fly as they are retrieved from the db
• Automatically generate hypertext links from metadata to find "more like
this one", with editorial guidance from the publisher.
• Entertain/ demo to prospect, to arrive at service concept and
• Determine leverage points, estimate time and resource requirements in
conjunction with engineering
• Propose system in conjunction with sales
• Prototype, build, operate
• One engineering manager, one systems administrator (TBH)
• Need product managers, and more engineers to meet demand
Draft June 19, 1994
June 16, 1994
Roughly, there seems to be a few trends that affect us (what am I missing?):
• Dial-up connections to the Internet will be a non-issue bringing
TCP/IP to home users at 14.4kb/sec (and newer faster modems). Small
business are still out in the cold.
• World Wide Web (Mosaic) has taken the Internet by storm. It is
deficient, but usable. It future is uncertain because of a central entity to keep it
together. We may see many semi-compatible commercial systems based on
different versions of different protocols. Z39.50 now has an uphill battle.
• Some of CD-ROM market is turning to online. This trend could
• All publishers must have a network publishing strategy (because of
• Unix is the dominant server platform, but something else is likely to
appear for the corporate market based on lack of user-friendly aspects. NT?
Windows (Cairo)? OS2 is losing; Taligent is late; Novell is possible, but...
• Internet growth is strong, but few corporations have TCP to the
desktop, but it is growing.
• Many many startups are jumping into the Internet non-market.
Draft June 19, 1994
Sample Internet Server Product
Brewster Kahle with input from Harry Morris
Some major options:
License pieces to others
License IR pieces from others
Corporate information server
Internet publishing platform for documents
Product description: Internet publishing platform for documents.
Platforms: Unix, Windows, CDROM
Time till first ship: 12-18 months
Protocols: HTTP(WWW/Mosaic), Z39.50-v2 (client-server)
People: 3 to start, 7 by the end.
Eng mgr, 4 engineers, 1 documentation, 1 support, .5 marketing
Cost: $1M for building 1.0. Marketing?
Cooperating companies: Intel, Apple, Sun, AOL
Competing companies: freeware. Mosaic Inc, InfoSeek,
NovX?, Oracle, Microsoft.
Distribution: freeware eval version,
$lk-$5k small server,
licensed big version.
modular for licensing and modification
Integrated CDROM/Online solution
Revenue / cust($/yr):
WAIS Revenue ($):
Draft June 19, 1994
Sample Internet Service
Some major options:
Be a service bureau for publishers
Go after sucessful CDRCDM db's to put data online
Go after sucessful Dialog db's to put them on the Internet
Go after catalog type sales to sell products
Construct a information service for businesses
Construct a information service for medicine
Construct a information service for law
Construct a information service for techies: MIS/sysadmins
Internet library system: bboards, email, ftp (basis of an AOL)
Product description: Information Service for Businesses
Platforms: Novell Windows, Lotus Notes, Mosaic, FAX
Time till first ship: 12-18 months
People: 4 to start, 9 by the end then large sales staff.
Publisher sales, Eng mgr, 3 engineers, 1 UI designer, 1 support, 1
sysadmin, 1 marketing.
Cost: $1.5M for building. Tremendous cost to establish our name and
Cooperating publishers: Dow Jones, NYTimes, ...
Cooperating tech companies: Novell, Lotus, Mosaic Inc
Competition: Dialog, Nexis, etc.; Reuters, AP, LATimes; new Inet co'
Sales strategy: telesales direct? var?
Comprehensive listings of: companies, products, people
Alerts based on profiles, (human assisted?)
WAIS Revenue ($):
Draft June 19, 1994
Sales and Marketing Perspective
LICENSES - SINGLE SERVER, SITE AND ENTERPRISE
Customers to date = Government & Universities
25+ sales in-process to Fortune 2000 for archiving/ indexing libraries
To sell two to ten licenses per week WATS must:
Same-day phone call return
15 minute explanation of "Where WAIS fits"
Understand customer situation/ application
Understand procurement cycle
Mail packet of relevant info
Follow-up via telephone & understand competition
Requirement today for one telemarketer
VARs are there for us Internationally - support via telemarketer
Publishers at our doorstep
Need definition of what WAIS online services department does
First meeting w/publisher
- Brewster at MIT
- IMC/KPMG/ APPLE/DOW JONES
Where WAIS fits
Online successes (DJ, EB, Scholastic)
What prospect must know
- How much data?
- At publisher or at WAIS?
- Who builds home-page, etc.
- What do they want from an online offering?
Demo on the Internet
- WEST law
- Dow Jones
- Supermodels (photos /graphics)
- Internet Shopping Network home page
WAIS needs an account strategy at this point
- today, clients leave with "wow" but no "to-do's"
Need strategy to get proposal "out-the-door"
Upon receipt of order, need online manager to hand-off
Resources needed to sustain/build this business unit
Does WAIS want to implement this strategy to CD-ROM market?
ONLINE CATALOG BUSINESS (Inmac)
Is this business the same as the online business above?
Is outline of steps to complete a project the same as online above?
CUSTOMER SERVICE ONLINE
Novell, Cisco Systems, etc.
Is this a market that we are missirig?
Is outlirie of steps to complete a project the same as online above?
These clients do not seem to be coming to us as are publishers and license customers
PROTOCOLS & COMMUNICATIONS - WAIS' OEM CUSTOMERS
On-the-way with Fulcrum, ConQuest and Dataware
Contacts made in exploratory stage with PLS, Silver Platter, and Excalibur
Need strategy and time for others Oracle, Verity, Frame, and others
Need account profiles of who's who and who competes with who
Opportunity for WAIS to become the de facto protocol suite for search engine market and
for all organizations posting to the Internet
WAIS approaching need for product manager to support OEM
- White papers for Fulcrum sales force
- Joint press announcements
- Support desk for sales forces & their channels
- Define how "technical" support will be handled
- Forecasting revenues is hard, filed visits required
There are VARs & classical Systems Integrators ready to represent WAIS for additional
- Clarinet application
- Internet connectivity VARs looking to get into software (WAIS, Mosaic, etc.)
- Systems Integrators such as Highland Digital that need to know about us
- Bruce to visit in Bay Area
Overall strategy is to hook a few VARs in the SF Bay Area and Internationally, then
PUTTING OTHERS IN BUSINESS
Systems Integrators with Internet experience
Brewster friends who do not make money on the Internet today
- Do we want to bring them along for the ride?
- Do we want to push them for applications and their own profitability?
- Do we want to ignore them?
"I want to provide and resell online services, let me come-in and learn more about WAIS"
Does WAIS want to assist these people - or, do we have time to?
Big RFPs will begin coming out as large organizations start to row a wish list for what they
want in an online service
University of Illinois bid that SUN is sending to us is 300 pages, and SUN is asking WAIS
how to respond to the bid
Another business opportunity, but a resource gulper along the way
The government and university customer that are our license customers today will issue
RFPs in one year when they realize that they have a wish list
Need version two of Internet World Bruce/John/Dia cut sheet (color, etc.)
Need fold-out on "Where WAIS Fits" that states our advantages
Need fold-out on online services that we decide to support from list above
Trade Show strategy (let's pick 'em, do 'em, and everybody helps)
Advertising - is it in WAIS' future in the next 24 months?
White papers on new ideas and easy-to-understand on what we do
- Release two of WAIS
- What features does it provide to our existing customers?
- What features does it provide our prospects?
- Does a new market open for us from the release?
- SUN, DEC, SGI
- Several projects within SUN alone
- Big Bangs
- Seminars (such as Mountain View)
- ISV's and letting them know about us
- Brewster's trip to Aspen
- SUN Sites
- All of these are worth something to us
- R.R. Donnelley's concept of setting de facto orpine standards
- Forums such as MIT/Stanford
- Industry watchdogs such as Yankee Group, Dataquest, etc, how do we work with
- With the next step of success we will need consistent stories to the press
- Need to release our own press releases on Fulcrum and how it impacts our
- Designate single point of contact to all staff of WAIS when the press calls
- How much support do we provide to make them successful?
Currently we do not have a "partner strategy", but it would help us to
deliniate one. This is a list of our current partners to give a background.
A "partner" should be an important relationship with some multiplier effect.
What do we want to get out of these important companies? Are we missing
something? Are we sleeping with the enemy? What focus would be helpful?
Hardware companies: Intel, Apple, Sun
Client vendors: Ensemble, AppleSearch
Vertical App companies: Helpdesk, library, publishers, CDROM companies
Search engines: Fulcrum, Conquest, PLS
VAR/Integrators: PRC, RJO, NZ, Italy, France
Publishers: Dowjones, EB, Scholastic, WestLaw
Foreign subsidiaries: Fujitsu, EB Japan
Network distributors: AOL
Draft June 19, 1994
Current Company Structure
June 18, 1994
Ownership: 74% Brewster, 26% pool, about 14% allocated.
Funding (brewster): $70k currently, peaked at $100k.
Board: Bill Dunn, Brewster Kahle, John Duhring
President: Brewster Kahle
VP Business Info Services: John Duhring
VP of Sales Marketing: Bruce Gilliat
Dia Cheney: Human resources, bookkeeper, accnts payable receivable
Harry Morris: Architect, primary product development
Kevin Oliveau: DC manager/ sales /contract fulfillment
Ben Lai: Technical Support
Margaret St Pierre: Protocol engineer (based in Philadelphia)
Gary Hromadko: Financial advisor to the board
Nick Sharf: Financial advisor
Ottavia Bassetti: Consultant on publishing projects
Lawyers: Wayland Brill of Hopkins and Carley
Bank: University National
Pursue sale of the company (AOL)
Raise money by equity corporate partners (AOL, Fujitsu?)
Raise money by VC (put us on a going-public track?).
Donate 51% of stock (brewster's) to a new non-profit organization.
WAIS-fed DC spin-off, Fujitsu joint venture, EB Japan joint venture.
Draft June 19, 1994
WAIS Inc. 1993 Cash Flow Projections
Company Confidential, 6/8/94
Rest of 94
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Slaves of a New Machine:
Exploring the For-Free / For-Pay Conundrum
Presented at the Fifth Conference on Organizational Computing, Coordination,
and Collaboration: Making Money on the Internet
Austin, Texas, May 10, 1994
President, Online Bookstore (OBS)
I very much appreciate being here today, and thank Andrew Whinston and the
people at the IC2 Institute, RGK, Texas Internet Consulting, and the University of
Texas for inviting me to speak at this conference. Making Money on the Internet.
I've picked up a lot of good tips, which I hope to apply at the Online Bookstore
(OBS) soon, because at the Online Bookstore I am *not* making money by
publishing on the Internet. And I don't know anyone who is. Since 1992 our
company, the Online BookStore, has been involved in Internet publishing, and
we have found it an exercise riddled with paradox and the unexpected, frequent
bouts of optimism and what-if idea sessions, a conundrum whose parameters
We have enjoyed commercial success from publishing *about,* talking and
meeting and consulting *about* publishing on the Internet, but are we making
money from the real live act of online publishing for a price? Not yet. As far as I
can tell, publishing intelligently in the distributed Internet environment still
*costs* money. I don't think I am alone in this realization. I am coming to suspect
that there may be no such as thing as publishing on the Internet, or rather,
publishing according to the definition of publishing as we know it from our
familiar paper reference points. This may not be the news you came to hear, but I
am happy to share what insights I have with you.
The Online BookStore started out under the umbrella of Editorial Inc., a
profitable publishing services business which I started in 1982, and which
produced hundreds of books for publishers. In 1991, we had 19 employees, three
offices, three shifts around the clock, and used desktop computers to produce
such titles as _The Sports Illustrated Almanac_ for Time/Warner, Andy Warhol's
biography for Bantam Books, and _Doing Business in Kuwait_ for Ernst and
Young. We were part of a services industry trafficking in paper. Using
computers, we were able to integrate the various publishing disciplines under
one roof, calling on hundreds of freelancers to supplement our in-house working
staff and become a publisher's publisher of sorts, a virtual corporation.
We caught the desktop publishing wave when it was just a swell out at sea in the
mid-eighties, and, in the resulting shift in the typesetting business from large
centralized composition companies to distributed PC-based typesetting
platforms, we rode the wave, and produced books using page composition
systems such as PageMaker, Ventura Publisher, Scribe, TROFF, TEX, and Polaris
Printmerge. Polaris PrintMerge was my favorite, not only because it was the first
and crudest PC-based typesetting platform, but because it introduced me to the
notion of electroruc slavery, our topic of the day. Turn the clock back ten years,
when my company was five people strong and I was salvaging a typesetting job
someone had abandoned in frustration before the machine; it was a manual for
hospital custodians, arranged in three columns, detailing how to keep a hospital
clean and sanitary. The janitors, our future readers, were supposed to start on the
upper left-hand column of each page with the instructions to don their uniforms,
and then by the bottom right hand entry, they had to "clock out wearing
uniform". Every page had the same layout for a different duty—mopping the
floors, emptying the trash—all items in all columns had to align three across.
Before the days of WYSIWYG, assessing one's success as a typesetter meant
printing out again and again, at about five minutes per page. The deadline
loomed. I would type and wait, type and wait, a period here, a comma there, a
drone before the keyboard, caught up in the electromechanical semi- idiot
production cycle. When I finally clocked out, called the Fed Ex man for the
finished package, I vowed never again to wear the uniform of typesetter. I would
This was my first personal experience with electronic servitude in the publishing
context, though I didn't realize it at the time: I saw it as a business opportunity
instead, which from a commercial standpoint it certainly was. I learned that users
of Polaris PrintMerge, no matter how smart, would become the victims of badly
designed software, would turn into drones, because that was their inevitable
function vis-a-vis their task and the tools afforded them for completing the task;
the humans workers functioned as the erring component, the wetware, charged
with coaxing a right-or-wrong result out of a desktop computer.
This was the much-touted cutting edge, offering profit without honor and the
opportunity to hire others to work Polaris PrintMerge till a better program came
along— which happened startlingly fast. I hired others to stay up all night staring
into screens, printing out, cursing the widows and orphans, and printing out
again. This first generation of servitude involved securing output from single,
unconnected machines, getting desktop computers to emulate the work of the
large dinosaur machines lumbering reluctantly off into typesetting antiquity; we
were selling output from these PCs, trying to recreate type of such quality that it
did not appear to be what it was— computer byproduct. So busily formatting the
output of computers gave us a way to use and begin to understand the machines.
but of course, in hindsight, how could we have been anything else but servants
to the machines? We did not apprehend the utility of our machines; using
computers to wrestle with the static and formatted output of single machines
was an error few perceived and many committed, are still committing.. We do
what we know, and, with the gift of hindsight, can see that this act of
manufacturing type on paper, produced by distributed computers sited in
decentralized locations, constituted an intermediate step from static to kinetic
As so often happens with computers, the cutting edge of Desktop publishing
became a swamp and then a backwater. It took about five years for publishers to
discover that there are cheaper ways to typeset than paying New England style
wages- particularly when they can demand from desktop publishers something
they never got or even knew they wanted from the large type houses—ownership
of the typesetting files and the macros that created them. Savvy publishers types
took advantage of the distributed environment coupled with the
disconnectedness of it all to put the servitude of function together with the
servitude of finance. People type fast when they are hungry, and a large part of
the typesetting business, the keyboarding at any rate, after the advent of desktop
publishing, migrated to romantic "offshore" locations— doublekeying in Taiwan
or Jamaica or the Philippines proves more accurate and far less costly than
paying a Massachusetts resident a living wage. So, while beginning to explore
new avenues of employment in the areas of CDs and hypertext publishing, we
continued to compete in the typesetting field, and got good prices for a while in
Utah and the Southwest, even hired freelancers third-hand in Singapore and
Haiti. Freelance typesetters in Haiti, the publisher hired me; I hired someone
stateside to hire someone in-country to hire the keyboarder, and still, the
publisher ended up paying maybe half what the job would have cost him at $15
per hour. Our topic today is slavery.
In 1895, before Polaris Print Merge was ever invented, Oscar Wilde wrote, in
"The Soul of Man Under Socialism," that "Unless there are slaves to do the ugly,
horrible, uninteresting work, culture and contemplation become almost
impossible. Human slavery is wrong, insecure, and demoralizing. On mechanical
slavery, on the slavery of the machine, the future of the world depends."
Somehow, in the arena of desktop publishing typesetting, human servitude to
the exacting output demands of the machine is more the norm. The focus is
output, and people become blind inputters of accurate information in the same
way that minimum wage workers in supermarkets do when running barcodes
over optical scanners.
I'm painting a grim picture, but the tide is about to turn. In the late '80s, we began
to produce and typeset books about computer networking, books focusing on the
structure and function of globally interlinked computers, which seemed to elicit
life from people when used as a communications medium, rather than
demearung them when used as an output medium. One such title, probably the
first book on computer networks worldwide, was John Quarterman's book "The
Matrix," published by Digital Press, which concerns computer networks and
conferencing systems worldwide. In 1989, when we were working on the
production of this book, the author introduced me to the then alien concept of
electronic mail. My assistant would pick up mail from my lone correspondent,
the author, print it out, put it in my in box, and I would handwrite responses
which she would input and send back in due time. It sounds quaint, but it
seemed to make sense to me at the time-in the same way computerized
typesetting on distributed though uncormected PCs made sense. We do what we
Some of the messages he would send had nothing to do with the text of the book
itself, however; messages posted to mailing lists from students in Tianamen
Square during the uprising that Spring; messages from Alaskans offering first-
person accounts of what the oil company wasn't telling us about the Valdez
disaster. Fresh and unmediated communication about things that mattered from
far corners of the world-news just hours old, unsanitized by the media. Here
was information, digitally recorded voices, coming out of the new machine,
which itself is a vast collection of intercormected machines being used as
conduits for human thought. Where the Haitian freelance typist was hidden and
voiceless behind four middlemen and had no hope of a phone no less an Internet
connection, the students in Beijing and citizens of Alaska could talk
electronically, and there were millions around the world who could and did
listen immediately, electronically, and no one stopped them. The Internet is an
open network, distributed, not contained, not owned by anyone.
I don't know if any Chinese students or Alaskan citizens profited in a commercial
sense from their posting or "publishing" on the Internet— for, after all, what is
publishing but writing for public consumption, regardless of the means of
distribution or, in the case of Internet publishing, access-but they profited in
other perhaps more valuable ways by making their voices heard as witnesses to
events of their time. Clearly, in this case, the new and networked machine did
not function simply as an output facilitator, a means of replication for familiar
words on a paper page. It functioned as a kind of worldwide broadcasting
Call it epiphany thanks to insight from the above incident, or call it simply local
economic necessity, our business shifted in the direction of electronic publishing,
and away from paper- based publishing. Another shift in the tide. The first major
step in the new direction, which involved us creating work rather than
producing it for publishers, was _The Internet Companion: A Beginner's Guide
to Global Networking_by Tracy LaQuey, which was the first popular trade book
about the Internet back in 1992. This book, produced with lightning rapidity and
permed by a very gifted and knowledgeable author, seemed to grow beyond
itself even before it was born and soon became a bestseller. At a time when there
was precious little current copyright information on the Internet, and Acceptable
Use Policies stood in the way of for-profit publishing on the Net, we couldn't just
put a book up there with a pricetag on it. It was a brave act for Tracy LaQuey to
take the innovative leap, to take the words we both wanted people to pay for in
the bookstores and give them away, in ASCII, on the Internet. That was the
beginning of the Online Bookstore in 1992. Many thousands came and grabbed
those files; many wrote in asking for more. None of the users paid a dime.
However, a conundrum is a paradox of sorts, and counterintuitive as it may
seem, giving the ASCII files away by anonymous FTP spurred the print sales of
the book. Who wants to read hundreds of pages in ASCII, anyway? Even our
publisher was supportive of our effort and happy with the resulting sales figures.
They are not alone. Prentice Hall publishes Brendan Kehoe's "Zen and the Art of
the Internet," which is available for free on the Net. His book continues to sell
very well. The same applies for MIT Press's publication, "The Hacker's
Dictionary," which is available for free on the net and sells briskly in paper as
well. This leads to conundrum number one: that giving something valuable away
for free can make money. It points to a richness not found in the tangible world
quite so readily: the more I give to you the more I have. Some call this a new kind
of marketing, and this was a pleasing lesson to learn. But was this experience
really online publishing, or was it the success of an early hybrid of online/ paper
The popularity of the online Internet Companion ASCII files drew my attention
further away from paper, and I was seduced by the prospect of the then 10
million people on the Internet~10 million literate people with disposable
incomes—attached to the Net. Why not acquire lots of Internet rights to lots of
books and put them online at the Online BookStore? Surely some percentage of
those people would buy files of a popular author's books for a reasonable price.
So to test the concept that people would pay for books online, we approached
one of the best-selling authors on the planet, Stephen King, and acquired first
serial rights to a story from his new book, "Nightmares and Dreamscapes." The
numbers were enticing: if only one percent of the ten million people paid $5 for
Stephen King's story, available only at the OBS and only on the Internet, then
that's half a million dollars!
We tried to make it as widely appealing and usable as possible: we formatted it
as a Voyager Expanded Book, in plain ASCII for those with only email access. In
Adobe Acrobat, in HTML format for Mosaic aficionados, acquired the German
rights, did a dual language edition, and released in time for the 1993 Frankfurt
Book Fair, the largest book fair in the world. The result: they all came, the radio,
the TV, the print media, creating lots of smoke and a nice firm footprint in the
sand of Internet history, but sales? The half a million dollars in per-copy sales?
All the companies who participated in bringing this story into its Internet
incarnation—the Internet Company, Texas Internet Consulting, Viking Penguin,
Hodder Stoughton, EUnet Germany, Hoffman und Campe, Aldea
Communications, Bunyip, and the Online BookStore— we didn't pull in enough in
per-copy sales to pay the phone bills for setting up the deal. A vast amount of
smoke, a tremendous marketing boost for the printed book again, lots of noise—
and by extension, lots of profit for the publisher and for the author—but handfuls
of per-copy sales. The per-copy sales model for a contained publication, a
publication which is complete in and of itself and is not lirJ^ed to anything else of
significance on the distributed network, does not seem to work. The OBS is not
the only online publishing site which has shown these results.
However, where per-copy faltered, site licensing proved a far better option,
which resulted in some commercial satisfaction on all sides. We have sold site
licenses to networks and organizations with good results. Site licensing offers
exclusivity to the organizations and networks which optioned the work, while
offering the author the reassurance of a having defined set of users, and a certain
hedge of protection against rampant copying and posting for a profit of his work.
One key element in site licensing seems to be timeliness; one publishes first
online, before the information or ideas grow old and gather moss. Perhaps this
site license model proves more lucrative than the per-copy sales model because it
enables the licenser to give the information away for free (after paying for it),
while achieving a defined benefit, a market advantage over its competitors, by
giving away scarce information on an exclusive or semi-exclusive basis.
This same combination of for-free/for pay can be seen in the sponsorship model,
the third commercial model after the per-copy and the site license, where, in the
same way that Mobil Oil brings you Masterpiece Theatre, a company might
sponsor a particular publication distributed for free on the Net. The familiar
economy of having the book buyer, the purchaser of information, pay for the
information, is reversed in sponsored publishing. The sponsor wins by having
his name, his product, associated with the freely distributed text. A discreet
screen of product information, a company logo attached to a file is all it takes.
The money then flows thus: the sponsor pays a certain amount, probably
pennies, each time someone picks up a file by anonymous FTP. The taker pays
nothing at all. What is being sold here is not the information, but the ^attention*
of the reader; the information or the ideas function as a conduit for....marketing,
again. Sponsorship is an easy and risk-free model, for the sponsor. What is at
risk, of course, is the objective sponsorship of truth. Which company might have
sponsored the students in Tianamen Square, for example?
We see this sponsorship model in frequent practice around the Net today, vast
electronic for-free Internet sandboxes such as SUNsite, funded by Sun
Microsystems and Cisco Systems and others. The sponsors gain by providing
their equipment to people making creative use of it, so others will come and see
what they are doing, and.. .buy the sponsors equipment or products. So, as the
freely available ASCII files for the Internet Comparuon fueled the sales of the
printed book, so too the freely available playground sandbox at SUNsite spurs
the sales of the sponsors' wares. It is kinetic advertising at its best, and it
capitalizes on the fundamental shift in economics which fuels the new machine,
the shift from the economy of scarcity, of buying and selling things, ideas
incarnated as physical things, to the economics of abundance, where what is for
sale isn't a thing at all, but the minds, the attention, of those paying attention to
the ideas and information. Such an apparently "free" online environment makes
for a welcome change, away from our common human penchant for owning and
hoarding things with price tags on them. In the economy of abundance, the
status of having shifts to the status of having access.
The notion of having access points to a fourth possible business model of
publishing on the Net: subscription-based publishing. In the globally distributed
multimedia hypertext environment— that's a mouthful, but how else do you say
it?~an environment where the traffic increases in the hundreds of thousands of
percent annually, and nothing is but what it not, a subscription seems like
another logical approach. Think of the digital stream analogy—does one want to
buy a piece of the stream in a bottle, or does one want to subscribe to the stream
and with that monthly subscription fee get all the fish, the poUywogs, the
flowing water in which to bathe-as well as the flotsam and the jetsam from the
But even the subscription model comes up wanting in the Mosaic environment.
Mosaic is, at this point, a free multimedia "browser" on the World Wide Web of
interconnected computers. Widely hailed as the "killer app" for online
publishing. Mosaic enables the users to navigate around the computers of the
world, accessing, picking up, customizing anything that can be digitized—for
free. But even were there toUgates firmly in place on every server in the world,
still, I think the traditional subscription model would at least need adaptation
from what we think of today when we think of a subscription to, say, cable TV or
"The New Yorker," because Mosaic epitomizes the three defining aspects of the
online publishing environment which are not found together in other broadcast
and print media: its distributed, interactive, and recorded nature.
A year ago, in the pre-Mosaic boom days, it seemed to the point to say that
"Content is King," and to think that successful online publishing meant offering
easy and commercially viable access to content. It only takes a short journey with
Mosaic, which has a learrung curve of under half an hour for the begirming user,
to realize that content is everywhere, and more is available every day. Content
alone fast becomes irrelevant in the absence of context. What good are a hundred
novels online, if the Net, the means of access, is not exploited to create a context,
a way of thinking about and reading these novels? Might we not learn from the
above for-free experiences, and consider a publishing model where readers are
allowed free access to those novels, in return for the readers allowing a publisher
to record and study their thought paths, the links they make while reading,
thiriking, and studying online? One may not want to pay $5 for an online
"contained" or finite, static, linear text of James Michener's "Chesapeake", but one
might pay considerably more if one could follow the electronically generated
thought path resulting from a course taught by the author himself about factual
fictiori, a course where one could navigate the links students make in their critical
thinking about the novel, navigate and link to related documents, graphics,
videos, sounds, experiences, and the author himself —all in real time. How does
one charge for such a contextual experience? What is in fact being published, and
what is for sale? In the kinetic publishing environment, apparently the static text,
the words, become subsidiary to their context as determined by each individual
The idea of publishers or other entities electronically tracking people's thought
brings to mind George Orwell's "1984": "The telescreen received and transmitted
simultaneously. Any sound Winston made, above the level of a very low
whisper, would be picked up by it; moreover, so long as he remained within the
field of vision which the metal plaque commanded, he could be seen as well as
heard. There was of course no way of knowing whether you were being watched
at any given moment. How often, or on what system, the Thought Police
plugged in on any individual wire was guesswork. It was even conceivable that
they watched everybody all the time. But at any rate they could plug in your
wire whenever they wanted to. You had to live~did live, from habit that became
instinct—in the assumption that every sound you made was overheard, and,
except in darkness, every movement scrutinized..."
In the new field of kinetic publishing, the currency becomes thought itself,
organized thought generated both individually and collectively, done so in a
reciprocal environment.. One can envision an environment then where, like the
big corporations funding places like SUNsite, perhaps individuals might
segment their own computers, their own servers, into public and private sites.
Given this scenario, publishing loses its lustre as an exclusive glamour industry,
ceases to be an organized corporate activity and becomes rather a way of
reciprocal interaction among minds, a commuruty of thought where one pays for
access to people and ideas in varying states of organization.
Online publishing is commercially successful today in the marketing sense,
successful for those of us who still try to own and hoard, owning things as a
bastion against mortality perhaps- -such marketeers are successfully protecting
their back end business by doling out carefully controlled portions in obvious
marketing efforts: a chapter here, a blurb there~and then selling the printed book
or the manufactured product. Publishing on the individual level, however, might
be more spontaneous, more complete, a freer marketplace of ideas that will
enable the testing of the concept that time and attention can indeed prove
valuable currency-currency which may not be defined in dollars- -online. Such
an individual as a publisher might make a living on the Net, make his own
Home Page, turn his "E" drive into a fast food joint or a used book shop along the
Infobahn, into a public sandbox for people to link to and peruse, while
maintaining a private segment to which real time access is licensed or sold, like
having "This Space For Rent" (point to head).
Charging for thought, kinetic, real time thought, combined with recorded
thought, what we used to call publications, might make money on the Internet.
Again, as with the first Internet Companion example, this model is a hybrid,
between what is living, real-time thought, and what is dead, that which is
already recorded. .We think by association, and associations are links; By
thinking about something or someone we give it value. The World Wide Web of
computers, where traffic in 1993 increased 341,000%, is a hypertext environment
allowing for the globalization of associative thought, the accessing and weaving
together of chunks of information into customized sets. Anything that can be
digitized can be linked to: texts, graphics, videos, sounds, experiences such as
online museum exhibits and libraries, and people as well can be linked to texts in
real time via email. What is for sale in this hyperlife environment is the naming
and pointing to resources, either live or dead, kinetic or static. If I were a net
architect tasked with building an Ethernet and my boss wanted it done by
tomorrow morning, I would pay dearly for the name of and online access to Bud
Spurgeon, an Ethernet expert here at UT, and pointers to his online documents,
and would pay most of all for access to him in real time to help me solve my
problem. This problem might be worth a thousand dollars torught, and nothing
tomorrow, if I lose my job because I couldn't get the network up and rurining. If
the online publisher offering this access to Bud, access which travels right up the
chain of the hierarchy of intimacy from email to phone and even face-to-face, that
publisher would be capitalizing on the multimedia capabilities of the webbed
We are talking about buying and selling people in real time. This gets me back to
the topic at hand: slavery. But no longer are we simply talking about typesetting
a janitor's manual in Haiti, of tying people to keyboards so they can make the
machines spit out pages in a highly regulated format. We are talking about
selling the digitized mind of a human being who chooses to sell access to his own
real-time interactive original thought. It would be prudent to strike a note of
caution, a note given sonority by Orwell's words quoted earlier, and in light of
the marketing lessons repeatedly learned from the commercial publishing
models mentioned earlier: per copy, subscription, site license, and, importantly,
sponsored publishing. It might prove worthwhile to identify two obvious routes
we can follow at this juncture: the new field of transcendental computing, or the
digitized slave route.
In a Webbed hyperlinked universe where pointing and naming is the way we
know and make ourselves known, the latter route seems a distinct possibility,
given the path blazed by our marketing and advertising folks on Madison
Avenue. Think of athletes who function as flesh masked in a blaze of corporate
insigruas, logos and endorsements. In the or\line recorded environment, words
matter: If I were really a savvy businessperson, I could charge companies for the
spontaneous words I utter in support of their efforts. Bunyip programmers are
brilliant. Texas Internet Consulting corners the market on Net demographics.
WAIS defines the standard for searching information on the Net. The Internet
functions thanks to Cisco routers. Aldea Communications. Cyberspace
Development Corporation. American Airlines. NEARNET. EUNET. Addison-
Wesley. Milliman & Robertson. M&Q Plastics Company. Patterson Public
Schools. It would be fair business practice for me to charge entities for my verbal
endorsements because I have an audience, whether in real-time reality or
virtuality. So my value as a pointer to others depends on the current value of my
state of thought, and this whole models splits into two options: either the
corporate slave model where people and their online incarnations are bought and
sold, or to the new field of transcendental computing where creative Muse is
supported. The second, and less commercially viable model, is the transcendental
computing model, where the individual publisher is egoless in the distributed
environment and functions independently of supporters to think objectively and
deliberately, rather than thinking for the purpose of advancing either himself or
his sponsor. Commercializing this model would be tantamount to marrying the
transcendental eyeball with the OCR scanner, hardly an appealing prospect. It
seems realistic to suppose that we are headed in the sponsorship direction,
supplemented perhaps, ideally, by transcendental computing on the academic
If we look around us now, we can see lots of other people making money from
the Internet. People selling hardware, connectivity, and software, they are
making money. They are the means-makers. But once acceptable means are in
place for, say, W3, what then? Will we see trading in the form of link brokers and
URL futures? Will humans be bought and sold for their minds rather than for
their ability to wash dishes or pick cotton? The Internet today is a multimedia
environment, and it might be useful to consider the record industry for a final
thought about where all this is going, for the conundrum before us involves
assigning value to both recorded and live iriformation. Recorded thought, ideas,
or music, is in a sense dead. It is live when it is reciprocal, as a concert is
reciprocal, or as, in a way, Karioke is reciprocal. As soon as the Rock band The
Doors recorded "Break on Through", it became posterity, static, a commodity to
be bought and sold, a commodity which increased in value after Jim Morrison
himself was dead at a young age. In the New Machine, the recording of "Break
on Through To The Other Side" might be available for free, while access to
Morrison would cost dearly, and access to Karioke interaction with the Doors
would cost as well.. These are the living, interactive links I am referring to, the
links that bind us to our new online environment and enrich us, rather than the
links that fetter us in servitude to the Great Records machine we are in the
process of creating.